Build, buy or outsource your AML compliance: what’s right for your business?
When it comes to AML compliance, the right solution does more than just tick compliance boxes. It streamlines processes, empowers your team, and delivers a smoother customer experience. Plus, it drives measurable returns on investment - a win for productivity and your bottom line.
If you're evaluating new tools or updating systems, it's important to get the balance right. The key is finding a solution that helps you stay compliant without slowing down operations. Let's compare!
Good for firms who:
Build
- Have the financial capacity, technical expertise and personnel to design, implement and maintain a custom AML system
- Are willing to make a significant upfront investment in developing an in-house AML system
Buy
- Prioritise client experience
- Seek long-term cost efficiency
- Operate across multiple offices, service offerings or jurisdictions
- Value internal compliance expertise
- Want to closely manage their risk
- Have bespoke compliance processes or want flexibility in onboarding processes
Outsource
- Don’t mind external parties engaging with their clients
- Are resource-constrained
- Have limited regulatory complexity
- Have minimal experience in managing regulatory risks
- Apply a standard onboarding process for all clients
Key Considerations
Build
High Cost and Resource Demand
Developing and maintaining a custom AML system requires significant financial investment and ongoing IT, compliance and security resources.
Compliance Risk
Keeping up with frequent regulatory changes across jurisdictions demands constant updates and in-house expertise, increasing compliance risk.
Data Security
Requires full control and responsibility of sensitive client information and compliance records.
Customisation
Allows for 100% customisation to match unique compliance workflows and risk models but brings the need for dedicated resource to keep it up to date.
Additional Strategic Considerations
- Does a custom AML system provide a strategic edge, or is AML compliance a non-differentiating function best handled by specialist software?
- Will in-house development improve client trust, speed or compliance efficiency, or will it drain resources from core business growth?
- Does building in-house provide more control and flexibility, or does it create technical debt and future scalability issues?
- Will AI, biometrics and automation trends make self-built solutions obsolete before they generate ROI?
Buy
Technology Advantage
Modern compliance platforms significantly reduce the traditional burdens of in-house AML processes
Control
Keeping processes in-house with technology support provides better control over the client experience
Efficiency
Automation handles routine tasks, allowing staff to focus on complex cases
Cost Structure
The platform-based approach can be more cost-effective at scale
Data Management
Better control over sensitive client information
Integration
Deeper integration possibilities with existing firm systems
Outsource
Technology Dependency
Reliance on external provider's technological capabilities and update cycle, with limited direct control over technological evolution and customisation
Control Limitations
- Reduced direct oversight of client interactions and compliance processes
- Potential friction in client experience management
- Less flexibility in adapting compliance approach
Efficiency Trade-offs
- Potential delays in handling complex cases
- Standardised processes may not accommodate unique organisational requirements
Cost Considerations
Predictable but potentially higher ongoing external service costs
Data Management
- Increased vulnerability in data transmission
- Less direct control over sensitive client information management
Integration
Limitations on what can be integrated
Additional Strategic Considerations
- Dependency on third-party provider's expertise and reliability
- Potential loss of internal compliance knowledge development
- Reduced ability to develop proprietary compliance approaches
- Increased vendor management overhead
- Outsourcing essentially trades direct control, customer relationships, risk management and customisation for standardised compliance processes.
Costs
Initial Setup
Build
High
Building your own AML solution requires significant upfront investment. Costs often cover internal developer time, system architecture, integrations with existing software, secure data storage, compliance framework design and robust testing before launch.
Buy
Moderate
Modern platforms reduce the need for extensive infrastructure investment but may include implementation fees which can include workflow mapping, data migration, system customisation, risk assessment set-up and more
Outsource
Minimal
Leverages existing systems and expertise
Costs
Structure
Build
- Variable. No platform fee / subscription, but ongoing spend for development, upkeep and enhancements.
- Harder to predict and control compared to a contract or service fee
- Variable data costs based on volume
Buy
- Fixed platform costs with data cost variation based on volume.
- Locked in via contracts
Outsource
- Fixed monthly service fee, fixed per case cost and often a fixed data type cost.
- Service cost is subject to the provider’s discretion
Costs
Ongoing
Build
Variable
- No subscription, but high development and maintenance costs
- Ongoing spend on staff time, updates, testing and compliance tweaks
- Costs grow as your system and needs expand
Buy
Predictable and controllable
- Software subscription
- Data usage costs
- Staff time on implementation, maintenance, and support
Outsource
Variable
- Usually on a pay-per-case basis.
- Can become expensive with high volumes.
- If charged hourly, rates can differ by level of expertise.
Costs
Vendor Lock-In / Exit Flexibility
Build
No vendor lock-in; full ownership, but tied to your internal teams.
Buy
Contractual lock-in common; exit fees or data migration costs.
Outsource
Strongest lock-in risk; switching may mean onboarding a new provider mid-cycle.
Control
Client Relationships
Build
Complete
Direct communication with clients through fully owned and branded technology
Buy
Complete
Direct communication with clients through white-labelled technology
Outsource
Partial
Third-party interacts with clients for document collection
Control
Processes
Build
Very high
Full control over quality standards, but consistency relies on robust design and upkeep.
Buy
High
Can customise automated workflows and requirements to match your risk appetite and processes.
Outsource
Low
Must adapt to the provider's processes, deviations from the process may incur additional costs.
Control
Quality
Build
Set your own standards and checks, but quality depends on your team’s build and upkeep.
Buy
Consistent quality through automated processes and mandated requirements with human oversight.
Outsource
Dependent on the third party’s standards
Resources
Staff Training
Build
High
Extensive training needed for developers, compliance teams and frontline staff to build, use, maintain and improve the system.
Buy
Minimal - Medium
Modern platforms are intuitive and include training resources specific to AML professionals. However, frontline staff may require more training.
Outsource
Minimal
Basic training on how to engage the service
Resources
AML Expertise
Build
All expertise must be developed or sourced in-house.
Buy
Built-in AML expertise through technology with automated guidance
Outsource
Access to specialist AML knowledge varies by provider
Resources
Allocation
Build
- Heavy internal resource use for building, testing and updating
- Automation handles routine AML tasks, staff focus on exceptions
- Still need an internal MLRO / AMLCO for oversight and approvals
Buy
- Automation handles routine tasks, staff focus on exceptions
- Legally required to have an internal AMLCO for oversight and approvals
Outsource
- Diverts some resources to managing the provider relationship.
- Legally required to have an internal AMLCO for oversight and approvals
Operations
Risk ownership and liability
Build
Full responsibility sits with you.
Buy
All customer data is and remains your property, the software provider is simply a data processor and full risk and liability remains with you.
Outsource
All customer data is and remains your property, the third party is simply a data processor and full risk and liability still sits with you.
Operations
Responsiveness
Build
System performance and fixes rely on your team’s capacity and priorities.
Buy
Flexible to your needs and priorities
Outsource
Varies with third party’s workload and/or SLA
Operations
Scalability
Build
Variable
Can scale with good design, but needs ongoing investment to handle higher volumes smoothly.
Buy
High
The technology handles increased volume automatically but may be constrained by internal staff capacity
Outsource
Medium
Likely face provider capacity constraints at peak times
Operations
Auditability
Build
High
- Design your own detailed logs and reports.
- Output quality depends on how well you build and maintain audit features.
Buy
High
- Automated logging of all actions and decisions.
- Easily accessible.
Outsource
Medium
- Usually includes audit trails but may be less detailed.
- May be difficult to get detailed reports from the service provider.
- Requires constant oversight and audits to ensure quality control.
Operations
Flexibility
Build
Very high
Full freedom to change workflows, rules and risk settings whenever needed - but relies on your team’s time and capacity.
Buy
High
Can quickly adjust processes, workflows, risk appetites and requirements through platform settings.
Outsource
Low
Changes must be coordinated with the provider, assuming they allow changes to the master services agreement.
Operations
Risk management
Build
Strong
You design all rules and controls to fit your exact risk appetite - but need ongoing updates to stay compliant.
Buy
Strong
Settings and automation ensure consistent application of rules and approaches to match risk appetite
Outsource
Medium
- Master services agreement is generic to meet the needs of multiple firms.
- May not align to your risk appetite.
Operations
Regulatory Alignment
Build
Manual
Manual updates needed to meet new rules. Speed depends on your team’s responsiveness. Manual updates needed to meet new rules. Speed depends on your team’s responsiveness.
Buy
Automated
Via platform updates aligned to meet regulatory changes
Outsource
Unknown
- Reliant on the provider changing their process to meet regulatory updates
- The speed of update may be limited by time spent on new processes, training etc.
Technology
Time to Value
Build
Slow
- Requires design, development, testing and rollout
Buy
Fast
- Off-the-shelf with configuration.
Outsource
Immediate
- Provider starts working as soon as onboarding is complete.
Technology
Data Security
Build
Variable
- Full control - security depends on your own infrastructure and governance.
Buy
High
- Relies on your approach to security.
- Software is usually ISO27001 compliant at a minimum.
Outsource
Unknown
- Relies on the provider’s approach to data security and their staff’s approach to physical security (access to the stored data)
Technology
Integrations
Build
Fully customisable - build as many integrations as needed, but requires time and developer resources.
Buy
Software-dependent.
Outsource
Provider-dependent:
- IT capabilities
- Size of your contract
- Value of your brand to them.
Support
After-Hours
Build
- System runs 24/7, but technical support and fixes rely on your team’s availability.
- After-hours AML support depends on your team’s availability.
Buy
- Software available 24/7
Outsource
Limited out-of-hours service but can be included with higher-value monthly agreements.
Support
Geographic Coverage
Build
High
Can be designed for global reach and multi-language support, but it depends on budget and integrations.
Buy
High
Modern platforms connect to global registries and often include multiple-language support
Outsource
Medium
Limited to local market with access to global data services. May incur additional costs for global coverage.
About First AML
First AML comes from the perspective of both a technology provider, but also as compliance professionals. Prior to releasing, First AML’s all-in-one AML workflow platform, we processed over 2,000,000 AML cases ourselves. Understanding the acute problem that faces firms these days as they try to scale their own AML, is in our DNA.
That's why First AML now powers thousands of compliance experts around the globe to reduce the time and cost burden of complex and international entity KYC. Source stands out as a leading solution for organisations with complex or international onboarding needs. It provides streamlined collaboration and ensures uniformity in all AML practices.
Keen to find out more? Book a demo today!